A while ago, Delphi members and guests brainstormed about ‘e-commerce’. We decided to assume e-commerce referred to physical goods, so the event attracted CEOs from companies selling perfume, couture, shoes and so on.
Scott however, left unsatisfied. What happens if you run a company selling back-office and business expansion services like Tricor? What about if you are selling PR, banking, insurance, education and consulting? As is the right of every Delphi member, Scott therefore asked me to organize a brainstorm on the topic of ‘e-commerce for services’.
‘E-commerce for services’ might seem a contradiction, given that we had defined e-commerce as relating to physical goods. In fact, the difference is more of emphasis than of substance, and in some ways the similarities are growing faster than the differences.
You can see the convergence in the way goods vendors try to ‘servitize their product’ and service providers try to ‘productize their services’. As Jimmy Hayes of high-end bag manufacturer Minaal points out, for goods vendors struggling during a recession, it makes sense to provide subscription based consulting and advisory services – this recurrent income can be very helpful. Conversely, service vendors (especially in Japan) try to make their services more ‘tangible’ and like a physical good. This is because the experience of using a service is more subjective, making the value harder to judge. Tying the service to a product or outcome/KPI helps in assessing value.
Another point of convergence is the broader digitization both types of companies have experienced since Covid 19. E-commerce is now considered by many to be a term too focussed on online mechanisms of ordering, paying for and delivering physical goods (i.e. substituting for bricks & mortar). However, Work From Home and fear of physical contact with suppliers, customers and regulators has caused digitization to affect company operations far more dramatically and deeply.
Any service company CEO wanting to benchmark his digitization journey since the onset of Covid 19 is welcome to attend.
Please note that Delphi CEO Summits operate according to strict Chatham House Rules.
When: Thursday, 3pm, July 30, 2020.
How: On Zoom.
Cost: DN members free, non-DN members 5,000 yen.
CEO Summits are the privilege of DN members to call when they wish to discuss a challenging issue with their peers.